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  • Home
  • Home Search
    • Your Favorite Listings
  • Featured Areas
    • Hermosa Beach
    • Manhattan Beach
    • Playa Del Rey
    • Playa Vista
    • Redondo Beach
  • Buyers
    • Creating Your Wish List
    • Deciding How Much House You Can Afford
  • Sellers
    • Increasing Your Home’s Appeal
    • Understanding The Buyer
    • 8 Steps To Selling Your Home
  • Contact
  • My Mobile App
  • Featured Listings
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Deciding How Much House You Can Afford


Your lender decides what you can borrow but you decide what you can afford.

Lenders are careful, but they make qualification decisions based on averages and formulas. They won't understand the nuances of your lifestyle and spending patterns quite as well as you do. So, leave a little room for the unexpected - for all the new opportunities your home will give you to spend money, from furnishings, to landscaping, to repairs.

Historically, banks use a ratio called 28/36 to decide how much borrowers could borrow. An approved housing payment couldn't be more than 28 percent of the buyer's gross monthly income, and his or her total debt load, including car payments, student loans, and credit card payments, couldn't be more than 36 percent. As home prices have risen, some lenders have responded by stretching these ratios to as high as 50 percent. No matter how expensive your market though, we urge you to think carefully before stretching your budget quite so much.

Deciding how much you can afford should involve some careful attention to how your financial profile will change in the upcoming years. In the long run, your own peace of mind and security will matter most.

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CalBRE# 01948465KW Beach Cities
830 S. Pacific Coast Highway, Suite #200El Segundo
CA 90245
310.779.4050
Nicole@NicoleNiquette.com

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